After pushing back above the .7400 level on Friday on the back of a recovery in Chinese financial markets and broad-based US dollar weakness following the release of the US non-farm payrolls report for June, the AUD/USD went on with the move on Monday, boosted by continued buying in the Chinese yuan which bolstered confidence across the Asia region.

The AUD/USD rose to as high as .7483 at one point during the session before giving back some ground in North American trade.

Investing.comAUD/USD Hourly Chart

Reflecting the improvement in investor sentiment seen in stocks, commodities and currency markets, the Aussie rose by close to 1% against the Japanese yen.

It also recorded a similar gain against the British pound on the back of renewed political uncertainty in the UK.

“The resignation of the British Foreign Secretary, Boris Johnson, illustrated the deep division within the British government over the UK government’s Brexit plan,” said Richard Grace, Chief Currency Strategist at the Commonwealth Bank.

“Markets dislike the political uncertainty.

“We anticipate the downward pressure on GBP will continue… as speculation of a ‘no confidence’ vote and leadership challenge upon Prime Minister Therese May mounts.”

As was the case on Monday, the Aussie’s direction will likely be dictated by the performance of Chinese financial markets today, especially the Chinese yuan which has proven to be influential on the Aussie in recent weeks.

While there is a smattering of economic data scheduled in Asia, none appears likely to generate any significant volatility in the Aussie.

Domestically, ANZ will release its weekly Australian consumer confidence survey at 9.30am AEST. That will be followed two hours later by the NAB’s Australian business confidence survey.

Regionally, China will also release consumer and producer price inflation data for June at 11.30am AEST. This report used to generate some interest across markets in the past but that’s diminished in recent years.

“The NAB business survey is unlikely to have much influence on AUD, nor will the release of Chinese June inflation data,” Grace says.

Updated Chinese monetary growth and new lending data is also expected to drop at some point during the session.

Later in the session, data highlights include UK industrial production, GDP and trade figures, German ZEW survey, housing starts and building approvals from Canada along with NFIB Small Business Optimism and JOLTS job openings from the United States.

Of course, markets will also be on the lookout for any additional headlines in the escalating trade war between China and the United States.

“Near-term the AUD has room to trade higher, but we remain sceptical the currency can sustained a move above 75 cents,” said Rodrigo Catril Senior FX Strategist at the National Australia Bank.

“We think it is only a matter of time before Trump makes an announcement on additional China trade tariffs and thus we wouldn’t be surprise to see the AUD eventually coming under renewed downward pressure.”